San Miguel Corp. president and CEO Ramon S. Ang is in talks with Asian Carmakers Corp. (ACC), the official importer and distributor of BMW cars in the country, looking on a possible acquisition of a stake in the luxury automotive company, SMC said.
In a disclosure to the Philippine Stock Exchange yesterday, SMC confirmed that discussions were ongoing for Ang’s eventual entry into ACC, noting that the SMC head was in talks with ACC chair and Palawan Gov. Jose Alvarez.
“We confirm that (SMC) is in talks with Alvarez and ACC for an investment by the company in the importation, distribution and servicing of BMW vehicles in the country,” SMC said.
SMC said that it would make a disclosure to the stock market “in the event a definitive agreement is concluded for the said contemplated investment.”
A car enthusiast, Ang has long been hinting at joining ACC, a wholly owned Filipino company under the Alvarez group of companies.
While ACC president Maricar Cristobal-Parco could not be reached for comment as of press time, company chair Alvarez has been reportedly confident about the acquisition.
Ang’s eventual entry into the automobile industry comes amid the looming excise tax on cars, which is expected to weigh heavily on the luxury vehicles industry.
ACC, for its part, reported flat growth in 2016, although the president of the car company said that they were currently enjoying a “temporary surge” in sales as consumers anticipate the excise tax increase.
Together with other leading members of the automotive industry, the official BMW importer and distributor in the country has cautioned against certain provisions in the first package of the Duterte administration’s comprehensive tax reform program, passed as House Bill 5636 and currently filed as Senate Bill 1408.
Cristobal-Parco recently told reporters that the current rates proposed under HB 5636, albeit watered down, were still outside the figures that the company was comfortable with, noting that this would curtail the growth of the luxury car segment.
Under House Bill 4774, which served as the first package before being revised to HB 5636, cars with a net manufacturing price of more than P2.1 million would be charged 200 percent in excess of that value on top of an additional assessment of P1.2 million.
HB 5636 has been passed in the lower house, featuring watered down rates, but its counterpart bill in the Senate retained the original high rate of 200 percent.
This might be a problem for potential BMW consumers, especially since the lowest price point of BMW’s product was P2.1 million and thus could reach as high as P9 million to 12 million, Parco said.